10 Sign’s That you might be living beyond your means!
Often, living a certain lifestyle is something that becomes habitual and something that can go unchanged or unnoticed for quite some time. By that we mean, should your financial situation not really align with the lifestyle you’re living, you could be living beyond your means for a long time, and that could land you in a sticky situation!
Below are few points which might resonate with you and show you that you’re starting to live beyond your means, give them a read and see if any resonate with you at all! If so perhaps you should look into your finances and see whether or not you’re spending your money wisely, but most importantly… sustainably.
1. Fun comes before important expenses or saving
It’s been a very difficult year and a half for many South Africans (and the world) and now that people are starting to get vaccinated and more things are opening up, people are looking forward to having fun again! For many this might mean, socialising and spending money on entertainment. For others, this could mean a trip up the coast- a little getaway of sorts! But what is fundamental to not lose sight of is… making sure you can actually afford it! You have to try and remain as realistic as possible. Make sure you’re doing the right thing and covering all your expenses and your savings goals before splashing on something that might not be 100% perfect for your budget.
Let’s not forget, we live in sunny South Africa! There is so much to do without breaking the bank! Beautiful beaches to go to, stunning walks and hikes to go on- with many of these options being free of charge! Take advantage of the amazing options South Africa has to offer that can be lots of fun, and still within a reasonable budget for you!
2. You could but don’t invest for retirement
You have that little bit over every month that you could dedicate towards topping up a savings account or ensuring your financial future with a great retirement fund… but you don’t. That’s ages away after all? No, this is not a great decision if you’re wanting to keep your finances sustainable and in the long term, stable. If you are not interested in investing in retirement funds, you might want to consider doing so, it’s the safe thing to do with your money if you can.
It’s important to remember that perhaps there will be a time when you won’t be earning money. You will be older and will not have the energy to work the way you are now, so how will you go about financing that? That’s the whole idea behind retirement funds, and if you would like to live comfortably when you are no longer able or willing to work you need to think about how you are going to do so.
3. You don’t budget and wonder where your money goes
It’s the end of the month and eeeeeek, you cannot wait till payday! Was this bad planning or was there in fact no plan. Thoughtlessly spending on those little things adds up, and fast. Remember a trick to not feeling as though your pockets are running empty towards the end of the month is planning and budgeting.
4. Your housing costs are too high
You feel nervous and overwhelmed when it comes to confronting your housing costs for the month, you might even be slightly unsure as to how you’re going to cover those costs at all. Paying off your housing costs every month needs to be comfortable, if you’re living beyond your means this might really be uncomfortably or a stressful time of the month for you.
5. You drive a car you cannot afford
It may be the car you’ve always dreamed of cruising around in, but you might not actually be able to afford it. Often people completely underestimate the costs of servicing vehicles, insurance, petrol etc! Make sure you’re in a car that is realistic to the lifestyle you can afford right now! If it’s not exactly your dream car, it doesn’t mean you cannot work to save for your dream car in the future. Good things take time! Don’t burn out your budget completely trying to drive around in something you simply cannot afford.
6. You use credit cards for emergencies
It’s not necessarily a negative thing to have a credit card on standby in case of emergencies. But ideally, you would only need to dip into your emergencies saving fund which you have created for cases such as this! When you don’t save and constantly make use of credit cards just to pay them off, you may start to live beyond your means and you can land in a sticky situation.
7. You don’t prioritise insurance even when you can afford to
Perhaps you don’t really think that insurance is that necessary, you’ve had it in the past and not needed to claim once! Well frankly, life sometimes throws a curveball at you. You really want to prioritise insuring your assets and liabilities when you can afford to! Accidents happen, and should it be you one day, you want to be insured to not be financially distressed.
8. You make good money but spend everything you earn
You are happy with your income as it stands, however, you also really love to just blow it on the occasional treat (or not so occasional treat). If you land up with nothing left to spend at the end of the month, and you find yourself just chasing your next paychecks, try to consider the fact that you don’t have the saving habits you need! There is always room for improvement – even when earning decently.
9. You play the comparison game
You are always pushing to have the latest things and the best of the best. Remember, living beyond your means often comprises of individuals feeling compelled to always have the best of the best and compare themselves to others. You need to try and rethink what is important to you and avoid playing the comparison game, try and rather think about what you need and what you would like and where to strike the balance!
Being a generous person is noble and kind, and where you can it is always important to give back! However, there are times where people give so much that they land into financial trouble themselves. It is always important to give back where you can and small acts of kindness is what makes all the difference in these hard times. Make sure you are still able to meet essential financial obligations and are able to save sufficiently before supporting other people when perhaps you may not have the means to currently.
When managing your own finances perhaps consider the effect that the factors above have on the way you use your money! Perhaps there is space for a few small changes and you can move into a new territory of financial wellness